Nayib Bukele, president of El Salvador, revealed that Chivo already counts on at least 3 million users. Economists believe that Chivo does not bank the Salvadorans and will be helpful after taking the USD 30.
One month after the official release of Chivo in El Salvador, President Nayib Bukele tweeted that this bitcoin and USD wallet has already reached at least 3 million users. It also involves people without a bank profile into the formal market to make digital payments and remittances.
This figure appears to be a success, but some financial experts doubt that several records would not represent the long-term use of the application. Through Twitter, Salvadoran economists Luis Membreño, Carlos Acevedo and Tatiana Marroquín discussed the prosperity of the system.
The statistics presented by Bukele highlight that almost 50% of the country’s population has already faced a registration procedure.
6.4 million people, according to the World Bank, and a percentage that will continue to grow and will make the opposition “look ridiculous” once they start experiencing the benefits, according to declarations from the government
Economists Said: The Numbers Mean Nothing
The economists Membreño, Acevedo, and Marroquín agree that this impressive number of records does not imply success in the plan.
They believe that it symbolizes only the interest in withdrawing the USD 30 that the government gives away to promote the system. According to statements shared by ElSalvador.com, once the gift voucher gets withdrawn, users would stop using the wallet.
The truth is that it remains to see what happens in the coming weeks to verify the wallet’s lifetime. So far, it appears that the Chivo system has become a solution for Salvadorans who are unbanked and need to make money transactions.
The wallet allows users to send and receive bitcoin and dollars without experiencing any commission. Transactions could be possible between users of the platform and could also happen to/from bank accounts and exchanges of the bitcoin ecosystem. It also works to save money and make digital payments.
Advantages for Salvadorans Outside the Country
The system also allows users to deposit or withdraw cash at ATMs. This feature highly benefits Salvadorans out of the country that desire to take advantage of it by transferring money to their relatives in El Salvador as remittances.
In The United States of America, there are already 50 official Chivo ATMs. These ATMs are in San Francisco, Chicago, Atlanta, Dallas, Houston, Doral, El Paso, McAllen, and Laredo.
El Salvador allows digital payments and remittances with bitcoin and USD without a bank profile. According to Abansa (the Salvadoran Banking Association), there are almost 5 million savings banks and checking accounts in the country’s banks.
At least the remaining 23% of the population is outside the formal banking system, a problem that has harmed the economy for decades.
In contrast, Marroquín highlights that the financial inclusion of people who operate in the informal market goes through another more complex side. According to the economist, the use of Chivo requires resources that several Salvadorans do not have, such as the internet on their mobile device.
By: Jenson Nuñez